Plaintiff
Bodum USA, Inc. (Bodum) has sued defendant A Top New Casting,
Inc. (A Top) for trade dress infringement. Bodum alleges that
A Top infringed Bodum's CHAMBORD® trade dress by
selling and promoting a French press coffeemaker that copies
the look and overall appearance of Bodum's CHAMBORD®
coffeemaker. A Top maintains that Bodum relinquished its
rights to enforce its trade rights when it granted a
third-party company a purportedly "naked" license
to the CHAMBORD® design. A Top has moved for summary
judgment on the basis of this affirmative defense. For the
reasons stated below, the Court denies A Top's motion.

Background

A
French press coffeemaker is a non-electric, manually operated
coffeemaker that usually consists of a cylindrical beaker or
carafe, a handle affixed to the cylinder, a base, and a lid
with a piston or "plunger" attached to a filter
screen. During the brewing process, a user adds heated water
to coffee grounds lying in the carafe and presses the plunger
downward, allowing the filter to separate the brewed coffee
from the used coffee grounds. According to Bodum, the
distinctive characteristics of its CHAMBORD® French-press
coffeemaker include the design of the metallic stand that
holds the carafe, the design of the handle, the distinctive
bands affixing the handle to the carafe, the shape of the
knob on the plunger, and the carafe's dome-shaped lid.

In
1996, Bodum brought a trade dress infringement lawsuit
against Culinary Parts Unlimited, Inc., another seller of
French press coffeemakers. Bodum alleged that certain
coffeemakers Culinary Parts sold and promoted under its
BONJOUR® brand copied the look and overall appearance of
the CHAMBORD® products. In 1997, as a part of an
agreement settling the claims raised in that lawsuit, Bodum
granted Culinary Parts a non-exclusive license to use the
CHAMBORD® trade dress on certain BONJOUR® products.
According to A Top, after Bodum granted that license, it
failed to exercise reasonable control over the nature and
quality of the BONJOUR® products that incorporated the
CHAMBORD® trade dress. Thus, A Top argues, Bodum granted
an uncontrolled or "naked" license, thereby
abandoning any rights it had to enforce the CHAMBORD®
trade dress. See Eva's Bridal Ltd. v. Halanick
Enters., Inc., 639 F.3d 788, 790-91 (7th Cir. 2011)
(trademark owner abandoned trademark rights by granting
license to use mark without retaining any control over
licensee).

Bodum
argues that it continues to exercise reasonable control over
the nature and quality of the BONJOUR® coffeemakers and
thus denies that the license it granted to Culinary Parts was
a naked license. The chief executive officer of Bodum's
parent company testified that, around the time Bodum entered
into the licensing agreement with Culinary Parts, it obtained
samples of BONJOUR® products and conducted factory
testing, including analysis of the steel and glass used in
the products. Bodum also relies upon the language of the
licensing agreement, section 4 of which provides:

4. Quality Control

A. Licensed Merchandise shall substantially and reasonable
conform to the level of quality with respect to materials and
workmanship as Licensee's current Monet product models.

B. Licensee will comply with all laws, rules, regulations and
requirements of any governmental or administrative body which
may be applicable to the manufacture, advertising,
merchandising, packaging, publicity, promotion, sale,
distribution, shipment, import and export of the Merchandise
and its componentry.

C. For purposes of monitoring quality, Licensee agrees to
provide Licensor, [sic] a sample of each model of Licensed
Merchandise, upon request, provided Licensed Merchandise is
not commercially available to Licensor.

Def.'s Stmt. of Mat. Facts ¶ 20. The licensing
agreement also allows either party to terminate the agreement
in the event the other party fails to perform any of its
material obligations. According to Bodum, therefore, it would
have the right to terminate the licensing agreement if
licensed products using the CHAMBORD® trade dress failed
to conform to the level of quality that Culinary Parts'
Monet coffeemakers displayed at the time the parties entered
into their agreement.[1]

Bodum
maintains that it has continued to exercise its contractual
right to monitor the quality of the licensed products. In
addition to its initial factory inspection of the
BONJOUR® products, Bodum emphasizes that its outside
counsel, David Bennett, has examined the licensed products
every year since 1997 at an annual houseware display show.
Bennett has become familiar with the design and operation of
French press coffeemakers through his representation of Bodum
in over a dozen trade dress lawsuits. He says that each year
he inspected the licensed products and did not notice any
change in their quality. Specifically, during Bennett's
annual examinations of the products, he visually inspected
the coffeemaker's frame, feet, handle, lid, safety lid,
carafe, and plunger; visually inspected and felt the steel
and glass used in the product components; and opened the lid
and tested the plunger. In addition to finding no change in
the quality of the licensed products, Bennett has stated that
he is unaware of any products liability actions alleging
defects in the licensed products since the licensing
agreement has been in effect. Bodum also notes that during
that period the United States Consumer Product Safety
Commission has not issued a recall of any of the licensed
products.

A Top
denies that the licensing agreement grants Bodum adequate
control over the BONJOUR® products. Specifically, A Top
notes that Bodum lacks any express right to inspect or
supervise the licensee's operations, and A Top points to
another section of the agreement indicating that Bodum shall
have no responsibility for the operation of the
licensee's business. A Top also denies that Bennett's
inspections of the licensed products constituted adequate
quality control. According to A Top, Bennett is unqualified
to assess manufacturing or design quality. Even if he were
qualified, A Top argues, adequate quality control requires
testing the products in a factory, as Bodum did initially
when it entered into the licensing agreement. In addition, A
Top points to deposition testimony from Bodum executives as
evidence that Bodum failed to exercise any control over the
quality of the BONJOUR® products. A Top notes that the
chief executive officer of Bodum's parent company could
not remember the last time he saw a BONJOUR® product
being tested and could not point to any records or evidence
of quality control taking place at Bodum's factory. A Top
also cites the testimony of Bodum's current chief
executive officer, who responded "No" when asked
whether Bodum has "any control over the quality of [the
licensee's] products." Def.'s Stmt. of Mat.
Facts ¶ 22. Bodum explains that the current chief
executive officer may be unfamiliar with the license
agreement because he has only held his position since January
2016, and there has been no need to report BONJOUR®
quality issues to Bodum management during his tenure.

A Top
has moved for summary judgment, arguing that Bodum's
naked licensing of the CHAMBORD® design bars Bodum's
claim that A Top has infringed the CHAMBORD® trade dress
by promoting and selling its own French ...

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